Windows and Android Sitting in HTC, K-I-S-S-I-N-G?

By Richard Adhikari
Oct 5, 2013 5:00 AM PT

Microsoft's Windows Phone operating system may become an option on HTC's Android-based smartphones, Bloomberg reported.

Terry Myerson, head of Microsoft's operating systems unit, made the request to HTC last month, according to unnamed sources, and will meet with senior HTC executives in Taiwan later this month to discuss the idea.

Further, Microsoft may be trying to line up new OEMs; a delegation led by CEO Steve Ballmer reportedly met with white-box handset makers last week during a trip to Beijing.

"Microsoft may have asked HTC -- that's possible -- and they may figure they have leverage because HTC were among the first to take up Windows Mobile (Windows Phone's predecessor), so there's that historical relationship," Michael Morgan, a senior analyst at ABI Research, told TechNewsWorld. "And HTC needs the business."

Microsoft and HTC declined to comment for this story.

Side-by-Side Smartphone

Android is the dominant OS among smartphones, with IDCforecasting it will have more than 75 percent of the worldwide market this year.

While the idea of Microsoft getting a free ride on Android's coattails is attractive, it is perhaps not practical.

"Is this something a consumer would want?" asked Ramon Llamas, a research manager at IDC. "As a guy who travels with multiple phones in his pockets and bags, I find that over time, you go with one OS and one platform."

There is no way to support two OSes on one device economically, ABI's Morgan pointed out. "You would have to spit the memory, and would require extra horsepower and extra memory, which means extra cost."

Further, having two OSes on one device will "require a set of virtualization technologies that I haven't seen in a mobile setting to date," Morgan stated.

A Simpler, Cheaper WinPho Device?

The other rumor reported by Bloomberg -- that Ballmer and other Microsoft executives chatted with white-box manufacturers in China -- suggests the company might be attempting to line up more OEM partners, possibly to make less expensive Windows Phone devices.

"That happens all the time, and there are major reasons why," ABI's Morgan said. "One is seeking payments for Windows Phone licenses; and the other is, 'Would you create Windows Phones and here's a deal we can give you.'"

Microsoft's current strategy of controlling the hardware in Windows Phone devices "has failed and they know it," Morgan continued. "Windows Phone was made to work on a set of specs from Microsoft, and they couldn't get devices to lower price points because they were demanding high-quality hardware."

Redmond "needs white-box manufacturers to make lower-priced phones," Morgan averred. "The lower price points we now see [are] Nokia selling its phones at a loss."

Microsoft "will talk to anybody and everybody who might be potentially interested in making a Windows smartphone," IDC's Llamas told TechNewsWorld. "Just like Android in the early days -- they talked to anybody and everybody, and look where they are now."

The sticking point would be the Windows Phone license, which Llamas described as "prohibitively expensive."

If Microsoft plans to get white-box manufacturers to make lower-cost Windows Phone devices, "it will have to do something about the availability of the SDK and lower its license fee, or maybe negotiate," Llamas said.

What About Fragmentation?

One of the main problems users had with Windows Mobile was that it was fragmented. There were no standards for quality, layout or design, and several versions of the OS were in the market.

That led Microsoft to redesign the OS from scratch, costing it valuable time to market. It also bound OEMs to very tight hardware specs.

Fragmentation may become an issue if Microsoft once again loosens its grip, but "you're Steve Ballmer and before you go out the door it's your job to make money," Morgan said. "You could go with a fragmented version of Windows Phone and get 15 percent market share, or go with the unfragmented version and retain 5 percent market share."